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Moody's warned that the ax was coming, and today it came. The credit rating agency downgraded 15 major financial firms today in a move that is sure to hurt their bottom lines and rattle markets, the New York Times reports. Moody's knocked Credit Suisse down by three levels, Morgan Stanley by two, and left Bank of America and Citigroup just two ranks above junk, reports Bloomberg. JPMorgan and Goldman Sachs also went down two notches.

The downgrades are a major blow to banks, which are already struggling to deal with regulations, a struggling US economy, and a sovereign debt crisis in Europe. But Moody's was determined to be rigorous after going easy on financial firms before the financial crisis. Affected banks will face higher borrowing costs and damaged core business in areas like derivatives. They will also go on offense, trying to convince customers that Moody's has overreacted: "We believe the ratings still do not fully reflect the key strategic actions we have taken," said Morgan Stanley in a press release.

i dont understand how these people are still in business and why should anyone listen to what they say ...i wonder how they are backed financially and why the irs hasn't still looked into their questionable work .....instead of bothering normal, hard working people why isn't anyone going after them ......

wwwonderer

Jun 22, 2012 10:23 AM CDT

Is it possible for Moody's to be downgraded? Didn't these guys rate the crap CDOs and CDSs triple A?

odowd80

Jun 22, 2012 9:48 AM CDT

Banks are doing poorly, so I can only assume the poor performance will be reflected in the salaries and bonuses paid out to finance executives.